Wall Street ends mixed

Published
8:00 pm EDT, Monday, April 21, 2008

Associated Press

NEW YORK -- Wall Street started the week with a mixed performance Monday, as investors regained a cautious stance in response to a weaker-than-expected profit report from Bank of America Corp. and disappointing news from a smaller bank, National City Corp.

Investors were clearly uneasy about extending last week's big gains after Bank of America reported that its first-quarter earnings fell 77 percent on write-downs and widening credit losses. BofA's news followed a week in which big-name companies in general turned in better-than-expected numbers for the first quarter, helping the major stock indexes to gains of more than 4 percent.

Wall Street has at times worried that a slowing economy and a potentially hesitant consumer would crimp profits -- especially for the financial sector -- in the first three months of the year. Shares of National City dropped after the Midwest bank said it got a $7 billion cash infusion from equity investors, lowered its dividend and posted a $171 million loss for the first quarter.

Not all the earnings news on Monday was disappointing. Merck said its profit nearly doubled in the first quarter because of a $1.4 billion distribution from a partner drug company and a slight rise in sales. Both Bank of America and Merck are among the 30 stocks that comprise the Dow Jones industrial average.

With little in the way of economic data scheduled to arrive this week, investors are looking at a big flow of corporate reports for insights into the well-being of the economy. At this point, investors remain cautious, but because they have already taken huge amounts of money out of stocks, the market appears stuck in a range -- fluctuating back and forth as traders recoil at disappointing news but then take advantage of bargain prices.

"The percentage of cash on the sidelines as a percentage of market value is the highest it's ever been," said Richard E. Cripps, chief market strategist for Stifel Nicolaus. "We have an acute level of risk aversion by investors."

According to preliminary calculations, the Dow fell 24.34, or 0.19 percent.

Gas hits new record

Rising gasoline prices tightened the squeeze on drivers Monday, jumping to an average $3.50 a gallon at filling stations across the country.

Crude oil, meanwhile, set a new record of its own, spiking after an attack on a Japanese oil tanker in the Middle East to close above $117 a barrel for the first time.

"It's killing us," said Jean Beuns, a cab driver in New York who estimated he is making $125 to $150 a month less than in the fall because of costlier fuel. "And it was so quick. Every day you see the price go up 5, 6, 10 cents more."

Diesel prices at the pump also struck a record high, of $4.20 a gallon, according to AAA and the Oil Price Information Service, putting pressure on truckers and other shippers who rely on the fuel to transport goods to market.

Prices are expected to keep climbing as they trace the path of crude, which has surged to new records for six trading sessions in a row. Oil prices are rising along with a host of commodities, from corn and wheat to gold and platinum.